Stocks took a plunge on the Tokyo Stock Exchange on Friday, battered by the yen’s sharp rise against the dollar after U.S. President Donald Trump threatened to impose punitive tariffs on all imports from Mexico.
The 225-issue Nikkei average dived 341.34 points, or 1.63 percent, to end at 20,601.19, a closing level unseen since Feb. 8. On Thursday, the key market gauge sagged 60.84 points.
The Topix index of all first-section issues finished down 19.70 points, or 1.29 percent, at 1,512.28, after losing 4.43 points the previous day.
The Tokyo market opened lower, soon after Trump announced on Twitter that the United States will impose tariffs of up to 25 percent on all imports from Mexico unless illegal inflows of immigrants from Mexico stop.
The Twitter post left investors increasingly risk-averse and sent the yen higher, brokers said.
A weaker-than-expected Chinese manufacturing purchasing managers’ index for May, released on Friday morning, also weighed on the Tokyo market, brokers said.
Both the Nikkei and Topix indexes accelerated their downswing in the afternoon, as the dollar weakened further and fell below ¥109 for the first time in about four months, brokers said.
“Trump’s tweet spurred selling in companies that operate in Mexico, such as automakers,” said Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co.
Investors retreated to the sidelines “to see Wall Street’s reaction later on Friday to the Trump tweet,” said Masayuki Otani, chief market analyst at Securities Japan Inc., pointing to a sharp drop in U.S. index futures in off-hours trading.
Falling issues far outnumbered rising ones 1,688 to 374 in the TSE’s first section, while 78 issues were unchanged.
Volume increased to 1.438 billion shares from 1.113 billion shares on Thursday.
Automakers fell across the board, with Mazda tumbling 7.13 percent, Nissan 5.38 percent and Isuzu 4.91 percent.
Oil names met with selling due to a decline in crude oil prices. They included Idemitsu, JXTG and Cosmo Energy.
Among other major losers were clothing store chain Fast Retailing and air conditioner-maker Daikin.
On the other hand, Japan Display skyrocketed 20.75 percent following the announcement of additional financial support from government-affiliated investment fund INCJ.
Ono Pharmaceutical surged due to an own share buyback plan.
Also on the positive side were cybermall operator Rakuten and game-maker Nintendo.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average slumped 390 points to end at 20,540.